Investors' guess helps stocks rise

Major indexes gain 1 percent on expectations the Fed will keep trying to boost economy

Associated Press

Associated Press

Published 6:58 pm, Monday, June 17, 2013

Specialist Niral Doshi works at his post on the floor of the New York Stock Exchange Monday, June 17, 2013. Stocks were up Monday because investors think Fed leaders will determine that the economy isn't recovering fast enough. (AP Photo/Richard Drew)

Specialist Niral Doshi works at his post on the floor of the New...

Trader Richard Cohen works in a booth on the floor of the New York Stock Exchange Monday, June 17, 2013. Stocks were up Monday because investors think Fed leaders will determine that the economy isn't recovering fast enough. (AP Photo/Richard Drew)

Investors are in a game of wait-and-see with the Federal Reserve. On Monday, they guessed that the Fed will continue trying to prop up the economy, and sent stocks higher.

The major stock indexes all rose about 1 percent in early trading and stayed there for most of the day, before dipping slightly in the afternoon. The Standard & Poor's 500 index rose 12.31 points, or 0.8 percent, to 1,639.04. It had been up as much as 20 points.

The Dow rose 109.67 points, or 0.7 percent, to 15,179.85. The Nasdaq composite rose 28.58, or 0.8 percent, to 3,452.13.

The price of crude oil rose throughout the day, but ended 8 cents lower at $97.77 a barrel in New York. Gold edged down $4.50 to $1,383.10 an ounce.

The market's gains were broad. Telecommunications was the only one of the 10 industry sectors in the S&P 500 to post a loss. Netflix did better than any other stock in the S&P 500 after announcing that it will run original TV series from Dreamworks Animation.

Overall, though, there were few big company announcements or economic reports. Trading was light, the day more a holding pattern than a referendum. Investors will have to keep guessing about the Fed's future actions until Wednesday, when Chairman Ben Bernanke holds a news conference at the end of a two-day policy meeting.

Investors sent stocks up Monday because they think Fed policymakers will determine that the economy isn't recovering fast enough. That might seem like a contradiction, but a still-weak economy would influence the Fed to continue its programs designed to stimulate the economy: keeping interest rates low to encourage borrowing, and buying bonds to push investors into stocks.